2 comments on “The FX is in ~~ Bankers are Rigging the Currency Markets

  1. Of historic interest concerning this issue:

    Of course, the Federal Reserve, being a private bank and not answerable to the US Government, did start overprinting paper dollars, and much of the perceived prosperity of the 1950s and 1960s was the result of foreign nations’ obligations to accept the paper notes as being worth gold at the rate of $35 an ounce. Then in 1970, France looked at the huge pile of paper notes sitting in their vaults, for which real French products like wine and cheese had been traded, and notified the United States government that they would exercise their option under Bretton Woods to return the paper notes for gold at the $35 per ounce exchange rate. Of course, the United States had nowhere near the gold to redeem the paper notes, so on August 15th, 1971, Richard Nixon “temporarily” suspended the gold convertibility of the US Federal Reserve Notes. This “Nixon shock” effectively ended Bretton Woods and many global currencies started to delink from the US dollar. Worse, since the United States had collateralized their loans with the nation’s gold reserves, it quickly became apparent that the US Government did not in fact have enough gold to cover the outstanding debts.

    from: https://abzu2.wordpress.com/2013/02/12/all-wars-are-bankers-wars/

  2. Such concerns were nonexistent prior to 1971, when the world had fixed exchange rates: currencies were a clearing mechanism, not an asset class. With the decision of the U.S. to terminate the convertibility of the dollar to gold, currencies began to be evaluated vis-a-vis their performance against other currencies (with the exception of China). Today currencies are an asset class separate from stocks and bonds. Indeed, the foreign currency exchange market constitutes the largest and most liquid market in the world, bigger than all the world’s stock, bond, future and options markets combined. Its trading volume
tops $3 trillion — a day.

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